June 19, 2014

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From now on companies will have to be a little more specific when filing software patents. The United States Supreme Court today ruled in favor of CLS Bank, a company that was accused by Alice Corporation of violating several of its patents relating to computer-based trading systems. Twice lower courts have found that Alice’s patents were invalid and now the highest court in the land has settled the dispute once and for all. In one of the two group opinions supporting the unanimous decision, Justice Clarence Thomas wrote that “merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention.”

This doesn’t magically invalidate all software patents, however. The opinions, especially that drafted by Justice Thomas, were careful to avoid ruling too broadly. Some filings involving abstract ideas may still be unique enough to deserve a patent. But as a general rule inventors will have to do better than simply recreating basic and abstract ideas with the aide of a computer — in this case the exchange of financial obligations.

This does set a precedent for invalidating vague software patents that come before courts in the future. And, when paired with the court’s recent decision to grant more power to judges to punish patent trolls, it appears that the Supreme Court has taken steps towards effecting the patent reform that Congress has so far failed to pass.